President Donald Trump on Tuesday criticized the 2022 bipartisan CHIPS Act, which allocates $52.7 billion in subsidies for semiconductor manufacturing in the U.S., urging lawmakers to repeal the law and redirect the funds to reduce national debt.
In a speech to Congress, Trump called the CHIPS Act “a horrible, horrible thing,” arguing that the subsidies have not yielded meaningful results.
“We give hundreds of billions of dollars and it doesn’t mean a thing. They take our money and they don’t spend it,” Trump said.
He suggested that eliminating the law would be a better use of the funds to reduce the national debt.
The CHIPS and Science Act, signed by then-President Joe Biden in August 2022, provided $39 billion in subsidies for U.S. semiconductor manufacturing and related components, along with $75 billion in government lending authority. Trump’s comments marked his strongest criticism of the law to date, with the former president suggesting that avoiding new tariffs could incentivize companies to build factories in the U.S. without the need for subsidies.
Commerce Secretary Howard Lutnick has previously praised the CHIPS Act but expressed interest in reviewing the grants finalized under the Biden administration. Under Biden, former Commerce Secretary Gina Raimondo secured agreements with five leading global semiconductor firms to establish factories in the U.S. to address national security concerns related to imported chips.
The Biden administration finalized more than $33 billion in awards in its final weeks, including substantial grants for companies such as Samsung Electronics, Intel, Taiwan Semiconductor Manufacturing Co. (TSMC), and Micron Technology.
Trump’s comments have raised concerns that his administration may seek to invalidate the binding agreements made under Biden. New York Governor Kathy Hochul defended the law, stating that it was instrumental in Micron’s $100 billion investment and 50,000 job creation in Central New York, while Trump proposed ending the law.
TSMC also recently announced a new $100 billion investment in the U.S. to build five additional chip facilities, a move praised by Commerce Secretary Lutnick. However, the Commerce Department clarified that it would not offer additional subsidies to TSMC, although the company is eligible for a 25% manufacturing investment tax credit.
TSMC has already received $1.5 billion of its initial award.
Representative Greg Stanton condemned Trump’s remarks, calling them a “direct attack” on Arizona’s semiconductor industry, noting that TSMC’s $100 billion investment would not have been possible without the CHIPS Act. Meanwhile, reports surfaced that about one-third of the staff in the U.S. Commerce Department office overseeing the $39 billion in manufacturing subsidies for chipmakers were laid off this week.
The new Trump administration, which is conducting a broad review of federal government projects, is reportedly re-evaluating the semiconductor funding and associated investments.
